Production on the rise

Industrial production and new orders went separate ways in January of this year. Whereas seasonally and working-day adjusted new orders tumbled by 7.4% on December of last year, production rose by a strong 3.7%. Sharp fluctuations in production and new orders are not unusual at the turn of the year as the impact of calendar irregularities and holiday effects are difficult to gauge correctly. For instance, December 2016 had one working day more and January 2017 even two working days more than the corresponding month a year earlier.  All told, we still think that industrial activity is on the rise.

In contrast to industry, construction output in January fell slightly compared with December. Overall production was up by 2.8% on the previous month. Key to first-quarter gross domestic product growth is the fact that industrial output in January was no less than 1.3% up on the average for the fourth quarter 2016. This means that the prospects are good that, in the first quarter of this year, output in this major sector will give an appreciable boost to growth for the first time in a year. For the current quarter we are penciling in gross domestic product growth of 0.5 – 0.6% over the final quarter of 2016.


Dr. Rolf Schneider

Allianz SE
Phone: +49 69 24431 5790

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